Buy a Grocer
Grocery-anchored projects aren't just the bulk of Houston's retail development, they're also outperforming in the investment sales arena. NewQuest managing partner Jay Sears (to the right of Hankamer & Associates' Ray Hankamer at BoyarMiller's annual CRE forecast) says there were eight grocery-anchored center sales this year for an average $187/SF. (How much Life cereal can people buy in one city?) They ranged from $8.5M (an 8.5% cap) to $48.5M (5.3% cap). On the flip side, there were 15 power center sales for an average $161/SF ranging from a 9.8% cap to a 6.5%.
Here's Jay with the other panelists at BoyarMiller's event: BoyarMiller chairman Chris Hanslik, Midway CEO Jonathan Brinsden, Trendmaker Homes prez Will Holder, GSL Welcome Group CEO Welcome Wilson Jr, and BoyarMiller shareholder Bill Boyar. We all know that Houston's industrial market is record-breaking, not just for us but for the country. But Welcome says our properties are still at a discount on the national level, with cap rates slightly above the US average. He tracked 24 industrial investment sales in Q3 totaling $146M. They average $46.36/SF and a 7.67% cap.